NSRV9

BRAEMAR SEASCOPE OFFSHORE MONTHLY MAGAZINE April/May 2012

ISSUE: 53

MARKET NEWS & ANALYSIS VESSEL DAYRATE CHARTS RIG NEWS

©Braemar Seascope Offshore

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Subsea Market Latest

Welcome to the latest edition of the Braemar Seascope Offshore North Sea Vessel Report. We are now seeing a pause in the market as rig utilisation has tightened but vessel rates have remained relatively stable due to an imminent batch of newbuilds and the availability of sublets. Surprisingly, the spot market has slipped away a touch and we have noted a lack of term requirements and a high volume of speculative tonnage due to deliver in coming months.

Around eight new PSVs are expected to join the spot market in the coming weeks and there will also be AHTS vessels returning from term work and boats being reactivated following lay-up.

In other news, Simek, is currently carrying out work to install a hangar and work boat daughter craft and NOFO equipment on the Havyard 832 CD Stril Mariner. Meanwhile, Total is continuing with its efforts to stem the gas leak at the Elgin field.

Average dayrates for spot AHTS fixtures in April were GBP 39,722 and GBP 30,900 for large and medium vessels respectively. Meanwhile, PSV rates were GBP 19,585 and GBP 15,827. However these figures could dip in the coming weeks.

Sean Bate Market Analysis Manager research@seascope.co.uk

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For the latest on the subsea construction and survey vessel availabilities please contact us for a copy of our Subsea Vessel Market Summary. We are constantly monitoring the requirements, fixtures and availability of the North Sea fleet. For more information please email us.

New Arrivals

T

here are a series of newbuild vessels poised to deliver on the North Sea market in the coming weeks. In total there are eight PSVs set to deliver between now and the middle of July. In addition, the Ocean Scout, which has been in lay-up since the last quarter of 2011, is set to rejoin the North Sea spot market before the end of May. The UT-706 designed vessel was built in 1976 and has a deck space of around 550 square metres.

The newbuild vessels include two STX PSV 09 designed vessels—the Brage Trader and the Troms Sirius. The Brage Trader is due to arrive in Aberdeen before the middle of May and will be available for charter until around the beginning of June when she is expected to undertake term work. There are also a pair of STX O8 CD vessels expected by the middle of June. The Viking Fighter and the Far Scotsman will both have DP2 and deck areas of around 810 square metres. In addition, there will be the UT-755L FD Incomparable and the large vessels Vestland Mistral and Island Crusader which will have deck areas of 1,018 and 1,000 square metres respectively and are due in late June and July.

The Havyard 832L designed Torborg is the final vessel expected before the end of July. The DP2 boat will have

Far Sabre

a deck of just over 900 square metres and is currently expected by mid-July.

Meanwhile, the AHTS Far Sabre is expected to arrive back in the North Sea by the middle of May. The UT712L vessel is en-route to Aberdeen from Brazil. The vessel was chartered on a term contract with Shell Brazil last year and it had continued to trade on the Brazilian spot market on conclusion of the period work.

SPEC BOX Far Sabre Built: Aker Yards Brevik Bollard Pull: 178t BHP: 15,900 Clear Deck: 540 square metres DP: 2 Fresh Water: 741m³ Fuel Oil: 1087m³ Mud: 538m³ Accom: 28 Click here for full spec

Chartering

Long-Term Requirements

There are seven outstanding long-term requirements 1 x PSV/Talisman /6-9 months / comm June 2012 1 x PSV/Shell UK/ 5 yr + 5 x 1 yr opt / comm Jan-Mar 2013 TBC PSV/Statoil/3 or 6 years + 3 x 1 yr opts / 2013-2014 1 x PSV/MLS/Total N / 4 yrs + 4 x 1 yr opt / comm 2014 1 x PSV /ERRV / Leiv Eriksson Consortium / 15 wells / comm Dec 2012 Jan 2013 2-3 AHTS / Exxon Canada / 2 yrs + 3 x 1 yrs / 2012-2013 1 x AHTS Chevron Canada / 150-180 days / comm July

Medium-Term Requirements There are five outstanding medium-term requirements: 1 x PSV / Shell UK / 2 months / comm 1st June 1 x AHTS / Centrica / 3-5 wells / comm 1st June 1 x PSV / Senergy / 1 well / comm Mid June 1 x PSV / ADTI / 1 well / comm June 1 x PSV / Polarcus / 3 months + opt / comm July Polarcus is a Seismic Vessel Owner - further details can be found by clicking here.

Heerema Charter for Rem Provider Heerema has fixed the medium sized PSV Rem Provider for two months firm. The UT-755 LC designed vessel will be carrying out . The vessel is continuing to trade on the North Sea spot market until it commences the workscope around July. The DP2 vessel has a deck area of around 688 square metres.

Enquest Takes on Malaviya 20 & 19 Sold The Malaviya 20 is currently working on a three month plus six one month options charter with Enquest. Originally the Malaviya 19 was fixed for the work and the vessel commenced the contract before being sold to Eidesvik and renamed the Viking Nereus. The vessel is currently undergoing in-house work before joining the North Sea spot market.

ŠCopyright Braemar Seascope Offshore 2011

Chartering

MLS Takes Normand Skipper for 100 Days

The large PSV Normand Skipper has been chartered for 100 days to MLS. The VS4220 designed vessel was fixed at a rate of around GBP 25,000. The Normand Skipper has a deck area of around 1,280 square metres, DP2 and accommodation for 23. The vessel has previously been working on long term contracts for Statoil since she was delivered in 2005. The vessel’s previous rate was understood to be around NOK 130,000.

Far Server Fixed by Nexen Nexen has taken the medium PSV Far Server on charter for three months firm plus one monthly option. The 2010built vessel will be carrying out general pool support work. The vessel completed a year-long contract with ConocoPhillips earlier in the year. The Far Server is a Havyard 832 CD designed vessel with a deck area of around 799 square metres and DP2.

Statoil Charters AHTS Duo for 4 Months Statoil has taken the AHTS vessels Island Vanguard and KL Sandefjord for four months plus four monthly options.

The vessel’s, which have been chartered on All Duties workroles, were fixed at GBP 35,000 and GBP 36,900 respectively. The UT-787 CD Island Vanguard has already begun work with Statoil and is due back in October. The KL Sandefjord is currently carrying out the rig move of the West Alpha for BP and is expected to do prelay work for the Polar Pioneer before commencing with Statoil.

Power Express to Peterson SBS The medium PSV Power Express has been fixed on a five month charter with Peterson SBS. The Dutchflagged 2006-built vessel has a deck area of around 663 square metres and is expected to be used in a pool support role. Earlier in the year Peterson SBS also secured the services of the medium PSV Rem Star on an 18month contract for a mix of walk to work and supply duties. ©Copyright Braemar Seascope Offshore 2011

Chartering

5-Year Total Contract for Normand Aurora

Total and Elf Exploration UK have awarded a five-year contract to the large PSVs Normand Aurora and Havila Commander. The large Solstad vessel was chartered at a rate of around GBP 16,500 for the firm period although the contract also includes options to extend the contract by two one year options. EDT Offshore Egypt has also recently chartered the standby vessel Normand Draupne on a one-year firm plus one-year option contract from April this year.

Two Vessels for Talisman 1-Year Charters The UT-705 designed Highland Pride and VS-485 designed Solvik Supplier commenced minimum one year contacts during April supporting Talisman's increased drilling activity with the Sedco 704 and Sedco 711 rigs. These additions will augment their existing term fleet of three PSV's - namely the Grampian Talisman, SBS Tempest and the FS Aquarius.

Centrica Work for Far Grimshader Centrica has taken on the Far Grimshader for six months firm plus one six month option. The 1983-built UT-706L designed vessel is expected to be on charter until around October. The vessel has recently been working on the north Sea sport market for a variety of charterers including Maersk Oil, Peterson SBS, Asco and Gaz de France. The Far Grimshader has a deck area of around 780 square metres.

North Vanguard Fixed to Team The UT-705 designed PSV North Vanguard has secured a four month charter with Team. The vessel charterer also hold eight one-week options on the vessel after the firm period. The North Vanguard is a 1990-built vessel with a deck area of around 844 square metres and DP1. The vessel, which will be carrying out general pool support work, is understood to have been fixed for GBP 17,500.

ŠCopyright Braemar Seascope Offshore 2012

Newbuild

Troms Sirius Due End of May

The newbuild STX PSV 09 L CD designed Troms Sirius is expected to join the North Sea spot market by around the end of May. The vessel, which will be equipped with DP2 and a deck area of around 1020 square metres, is currently charter free upon arrival on the market in Stavanger.

The vessel is also equipped for Oil Rec and NOFO 2009.

Troms also has a sister ship which is currently under construction that is due for delivery in March 2013.

FD Incomparable Delivers Mid June Fratelli D’Amato’s newbuild UT-755 XL vessel FD Incomparable is expected to be delivered in June. The vessel is a sister ship to the FD Indomitable, FD Honorable and FD Remarkable. The vessels, which have all been built at the Rosetti Marino yard in Italy, are equipped with deck areas of around 716 square metres, DP2 and Oil Rec. The FD Honorable is also currently working on the North Sea spot market and most recently carrying out a charter for Taqa.

First of Farstad PSV 08 CD Newbuilds Farstad’s latest newbuild PSV is set for a June delivery date. The PSV 08 CD designed vessel is currently under construction at the STX yard in Tomrefjord (Langsten). The Far Scotsman will have a deck area of around 810 square metres, DP2 and total capacity for 30 personnel. Farstad also has five further PSV 08 CD designed vessels: Far Skimmer, Far Solitaire, Far Stella, Far Spica and Far Starling due out in September, October, February 2013, March 2013 and May 2013.

Late June for Vestland Mistral Vestland Offshore are currently recruiting qualified crew for their newbuild vessels the Vestland Mistral and the Vestland Mira. The VS-485 designed Vestland Mistral is due to be delivered from the Hellesøy Verft shipyard in late June. The vessel will have DP2 and a deck area of around 1,000 square metres. The Vestland Mira is a Havyard 832 L which is currently expected to be completed in October. ©Copyright Braemar Seascope Offshore 2011

Total Plans Elgin fix

The rig market in the North Sea continues to be strong with jack-up utilisation being reported to have reached a threeyear high. At the end of April it was estimated to have hit 97%. The Transocean GSF Galaxy I was the only inactive unit however it is currently undergoing reactivation to commence a one-year charter with Nexen.

Meanwhile, Premier has signed a longterm contract with Awilco that will see the WilPhoenix chartered until the end of February 2014 with options for an additional 250 days that could see the rig remain fixed until late in the fourth quarter of 2012. The programme will start in direct continuation of the current contract with Premier.

On the Semi-submersible market utilisation is around 92% with three inactive units; the Ocean Guardian, JW McLean and Sedco 712. The Ocean Guardian is being readied for a contract with Shell from July although the other two are presently stacked.

In the Barents Sea, Rosneft and Statoil have agreed to jointly explore offshore fields in the Russian sections of the Barents Sea and Sea of Okhotsk. The deal has also seen the partner announce intention to place orders with Russian shipyards for the construction of iceclass vessels and drilling platforms.

Total has announced that it has reached an important stage in stopping the leak on the G4 well at the Elgin complex. The West Phoenix rig has moved into the exclusion zone to act as the support vessel for pumping heavy mud in to the well. In addition to this, drilling of the fist back-up relief well by the Sedco 714 is still progressing according to Total’s plan. Further details here and a video can be found on the next page.

Rig Chart Rig Activity by Type and Country Norway UK/Irl

Drillship Jackup Semi-Sub Total

1

1

8

16

21

16

30

33

Denmark Netherlands

Stacked without future contract

Stacked with future contract Total 2

5

5

6

6

1

3

39

2

3

42

3

6

83

Video of Total Planned Solution for Elgin Gas Leak

Bunker Price Bunker Price in Aberdeen 2011 to Present 700

Bunker Price GBP/MT

650

600

550

500

450 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12

Price courtesy of Scandinavian Bunkering, subject to supply method, volume and market fluctuations.

Oil $140

Price

2005 2005--2012

$120 $100 $80 $60 $40 $20

May-05 Jul-05 Sep-05 Nov-05 Jan-06 Mar-06 May-06 Jul-06 Sep-06 Nov-06 Jan-07 Mar-07 May-07 Jul-07 Sep-07 Nov-07 Jan-08 Mar-08 May-08 Jul-08 Sep-08 Nov-08 Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09 Jan-10 Mar-10 May-10 Jul-10 Sep-10 Nov-10 Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12

Jan-05 Mar-05

$0

Standby/ERRV

Vos Dee Fixed for 1-Year to Talisman

Talisman Energy has chartered the Vos Dee for 1 year to support a drilling programme with the Sedco 711 in the Central North Sea from July. Meanwhile, Nexen has recently taken delivery of the Vos Ranger for support of a nine-month drilling programme with the GSF Arctic II. Nexen already has a further three Vroon operated vessels on long-term charter namely the Vos Don, Vos Lismore and the Vos Victory.

Southern North Sea Chartering In the South North Sea, the 1967 built Putford Sky has recently been released by BP on completion of a multi-year contract supporting the Amethyst field. The vessel has been withdrawn from service with BP chartering the 2007 built Vos Tracker for a minimum of two years as a replacement.

Senergy has recently taken delivery of the Vos Patrol to support a one well (circa 75 days) programme on Dana’s Platypus field with the Ensco 80. Petrofac has also confirmed the charter of the Vos Raasay for 5 months on ATP’s Kilmar field.

Modern Newbuilds in Demand Charterers are increasingly fixing modern/newbuild tonnage at premium rates this is evidenced by the news that North Star now have commitments for all four IMT950 units delivering from Balenciaga in 2012. The Grampian Don & Grampian Dee are already on charter to BG & SPD respectively and the last two (Grampian Discovery/Grampian Defiance) are fixed from delivery with Shell UK & Dong. The Grampian Defiance will support DONG's one well (circa 90 days) programme West of Shetlands with the West Navigator from September.

Standby Market Summary Full details of the UK and Irish Standby Market are available in the Braemar Seascope Offshore Standby Market Summary. The next edition of the report, which is due out soon, contains an extensive commentary from our brokers who deal with the Standby market on a daily basis.

There are also full fleet listings of Standby owners and an overview of the newbuild and fleet replacement programmes.

For further details email: research@seascope.co.uk ©Copyright Braemar Seascope Offshore 2011

Subsea

Reef Subsea Secures Talisman Work

Talisman has contracted the two new subsea construction support vessels Reef Larissa and Reef Despina. The contract covers 230 working days in total for both vessels plus additional options. Reef Despina and Reef Larissa were chartered last November from Neptune Offshore AS for five years. The vessels have an LOA of 98.6m, accommodation for 75 personnel and 150t offshore cranes. The vessels also have 844 square metre decks, two work class ROVs and a moonpool.

African Vision Prepares for Nigeria Role The ex Rem Fortune which was sold to Marine Platforms has been renamed African Vision and has been undergoing work in Aberdeen ahead of a long-term contract with ChevronTexaco in Nigeria. Marine Platform is an indigenous Nigerian Company offering Oil and Gas Services including completion, subsea services and vessel chartering.

Balder Field Charter for Normand Clipper Ocean Installer has been awarded a contract by ExxonMobil Exploration and Production Norway AS (EEPNAS) for survey and intervention work at the Balder field. The work will be carried out in mid May by the chartered vessel Normand Clipper. The Normand Clipper is a DP2 subsea construction vessel with two permanently installed workclass ROVs. The vessel is also equipped with a VLS for installation of flexible pipelines, umbilicals and risers.

Subsea Market Summary Latest For the latest on the subsea construction and survey vessel availabilities please contact us for a copy of our Subsea Vessel Market Summary. We are constantly monitoring the requirements, fixtures and availability of the North Sea fleet. For more information please email: aberdeen@seascope.co.uk

ŠCopyright Braemar Seascope Offshore 2011

Renewables

C-Bed Extends Accommodation Fleet

Dutch floating accommodation provider C-Bed has acquired the M/S Julia from Irish Shipping Ltd Barry. The vessel, which will change its name to Wind Perfection, will become the third floating hotel in the company’s fleet. All the C-Bed ships are classed as traditional ro/pax ferries but have been rebuilt for offshore accommodation roles.

The other vessels in the fleet are Wind Solution and Wind Ambition which are currently operating in the North Sea. The new vessel is expected to work for Siemens in 2013.

Sea Jack Carrying Out Teeside Installation The jack-up vessel Sea Jack is carrying out installation of foundation monopoles at the Teeside Offshore Windfarm.

The vessel is being supported by the Leslay Hay and Alisa as well as the Sea Golf and Sea Beaver. The Teeside Offshore Wind Farm will consist of 27 Siemens 2.3 MW turbines located around 1.5km off the coast of Redcar in Cleveland. Work at the site is expected to be completed

by November.

Swiber Else-Marie at Walney Windfarm The Swiber Else-Marie has been carrying out work on the Walney Offshore Windfarm performing burial of infield and inter-array cables. The vessel has also been surveying mattress laid at a telephone cable crossing. Upon completion of the workrole the Swiber Else-Marie will demobilise in Barrow and join the Ormonde Windfarm to carry out completion work on cable burials there.

Renewables Report For further details of the recent movements in the renewables market please see the latest edition of our Renewables Report which can be viewed online by clicking here. If you would like to be included on the distribution list for this report please email research@seascope.co.uk . Our brokers are dealing with an increasing amount of work in the Renewables market, please feel free to get in touch with your requirements or to discuss the market in general. ŠCopyright Braemar Seascope Offshore 2011

AHTS Dayrates

Average North Sea Spot AHTS Rates 2011/12

£90,000

£80,000

£70,000

Average Spot Dayrate

£60,000

£50,000

£40,000

£30,000

£20,000

£10,000

£0 Jan

Feb

Mar

Large - AHTS (16,000+ BHP) 2011

Apr

May

Jun

Medium - AHTS (12-15,999 BHP) 2011

Jul

Aug

Sep

Large - AHTS (16,000+ BHP) 2012

PSV Dayrates

Oct

Nov

Dec

Medium - AHTS (12-15,999 BHP) 2012

Average North Sea Spot PSV Rates 2011/12

£25,000

Average Spot Dayrate

£20,000

£15,000

£10,000

£5,000

£0 Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Large PSVs (700m2+ Clear Deck) 2011

Medium PSVs (500-700m2 Clear Deck) 2011

Large PSVs (700m2+ Clear Deck) 2012

Medium PSVs (500-700m2 Clear Deck) 2012

Oct

Nov

Dec

Jan-04

£0

Large PSVs (700m2+ Clear Deck)

Medium PSVs (500-700m2 Clear Deck)

Mar-12

Jan-12

Nov-11

Sep-11

Jul-11

May-11

Mar-11

Jan-11

Nov-10

Sep-10

Jul-10

May-10

Mar-10

Jan-10

Nov-09

Sep-09

Jul-09

May-09

Mar-09

Jan-09

Nov-08

PSV Dayrates

Sep-08

Jul-08

May-08

Mar-08

Large - AHTS (16,000+ BHP)

Jan-08

Nov-07

Sep-07

Jul-07

May-07

Mar-07

Jan-07

Nov-06

Sep-06

Jul-06

May-06

Mar-06

Jan-06

Nov-05

Sep-05

Jul-05

May-05

Mar-05

Jan-05

Nov-04

Sep-04

Jan-04 Apr-04 Jul-04 Oct-04 Jan-05 Apr-05 Jul-05 Oct-05 Jan-06 Apr-06 Jul-06 Oct-06 Jan-07 Apr-07 Jul-07 Oct-07 Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12

£0

Jul-04

May-04

Mar-04

AHTS Dayrates Average North Sea Spot AHTS Rates 2004 2004--2012

£140,000

£120,000

£100,000

£80,000

£60,000

£40,000

£20,000

Medium - AHTS (12-15,999 BHP)

Average North Sea Spot PSV Rates 2004 2004--2012

£40,000

£35,000

£30,000

£25,000

£20,000

£15,000

£10,000

£5,000

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Sean Bate Market Analysis Manager 25 Carden Place Aberdeen AB10 1UQ UK Phone: +44 (0)1224 628470 Fax: +44 (0)1224 621444 E-mail: research @seascope.co.uk

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